B.C. unicorn Trulioo cuts jobs as company exits small business market

Trulioo CEO Steve Munford poses for a portrait at the company’s offices in downtown Vancouver, BC on February 7, 2022.Jesse Winter/The Globe and Mail

Another Canadian unicorn, Trulioo Information Services Inc., has laid off staff, although the Vancouver company says its cuts are not part of a broader effort to tighten its belts to adjust to worsening economic conditions, as it says was the case across the industry.

Steve Munford, CEO of Trulioo, said in an interview that the provider of online identity verification services for digital businesses laid off 24 employees in Canada earlier this month and expects total cuts to reach 40 to 50 globally, which is between five and 10 percent of the workforce would account for .

The cuts stem from the company’s decision to stop selling to small businesses, a market segment that represented just 3 percent of its $100 million-plus annual revenue but consumed half of the company’s “go-to-market” resources , namely marketing and sales staff. The cuts were focused solely on that area and “not a single person in engineering, product development, product management, general and administrative, legal partnerships was affected,” Mr. Munford said. “It was really an economical business decision driven by this segment. We’ve lost money’ selling to small businesses. “We’re focused on where 97 percent of our revenue is and what’s driving our growth” in the larger enterprise segment of the market.

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Trulioo is able to digitally verify the identities of most people in the world and hundreds of millions of businesses. Trulioo’s customers, which employs more than 400 people, include payment processors, online marketplaces, cryptocurrency exchanges and financial services giants.

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It was one of several Canadian tech companies that decided earlier this year to scale back hiring plans as a precautionary measure as high inflation, rising interest rates and other geopolitical and economic challenges weigh on economies around the world. However, while several other money-losing tech companies have since announced severe rank reductions to conserve cash, Trulioo doesn’t plan to do so, having typically operated at or above breakeven on an operating basis — a relative rarity among early-stage growing companies.

“If we had any inclination to make further reductions in the near future, we would have done so immediately,” said Mr. Munford. “But we don’t.”

Although Trulioo is forecasting slower sales growth in 2022 than last year’s 100% increase, “the fundamentals of our business are strong,” Mr. Munford said.

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He added that the company still has “a strong cash balance” after raising $394 million last year in a Silicon Valley TCV-led deal that raised Trulioo to $1.75 billion after funding valued (start-ups worth more than $1 billion). are known as “unicorns”). Other investors include Blumberg Capital, Mouro Capital, the venture capital arms of Citigroup Inc. and American Express Co., Goldman Sachs Group, Banco Santander and Framework Venture Partners.

“If you look back at past economic cycles, companies with strong balance sheets that stay the course ultimately own their markets. They weren’t the ones who had previously had poor economies or were constantly raising money or had high cash burn rates and couldn’t afford to ride out those cycles. These are the ones facing challenges and they are not us.”

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